The productivity of U.S. workers surged by 4.7 percent at an annual rate in the third quarter of this year, marking the fastest pace in two years, the Labor Department reported Tuesday.

The figure for productivity, the amount of output produced for each hour of work, was an upward revision from the pace of 4.1 percent estimated a month ago.

The surge of 4.7 percent for productivity followed an increase of 2.1 percent for the second quarter and was the best showing since a 9.6 percent surge in the third quarter of 2003.

Data showed that unit labor costs, an important indicator for inflationary pressures, were down by one percent at an annual rate in the July-to-September period, doubling the 0.5 percent drop reported originally.

That was the second consecutive quarterly drop in unit labor costs. During the April-to-June period, unit labor costs declined 1.2 percent.

The declines in unit labor costs followed three quarters of big increases that had raised worries that wage pressures were beginning to mount.

Productivity is the key factor in boosting living standards because it allows companies to pay their workers more based on their increased efficiency without having to resort to raising the price of their products, which would increase inflation.

However, the downside of that increased efficiency is that companies, by getting more output from their existing work force, are able to avoid hiring new workers.

Source: Xinhua